Abstract
In 1980, Census data indicate, housing prices in large US cities rose with distance from the city center. By 2010, that relationship had reversed. We propose that this development can be traced to greater labor supply of high-income households which reduced the tolerance for commuting. In a tract-level data set covering the 27 largest US cities, years 1980-2010, we find support for our hypothesis using a Bartik-type demand shifter for skilled labor: full-time skilled workers favor proximity to the city center and their increased presence can account for the rising price premium commanded by centrality.
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